Answers to 16 questions about Wolt couriers
In this post from October 2020, we briefly go through how Wolt works with our courier partners, why couriers are self-employed and not employed, and what is our view on the opinion of the Finnish Labour Council.
Part one: How we work with the couriers and why
- Why are Wolt’s couriers self-employed?
The couriers decide themselves when they work, where they work, they use their own equipment, they choose which vehicle they deliver with, and they can freely work with competitors. These are characteristics of self-employment rather than traditional employment where a person typically has a boss, shifts, they are working with the company’s equipment and they are not allowed to work with competitors.
This setup has proven to be good both for the couriers and Wolt. For the couriers, it allows for the maximum amount of freedom and the chance to affect earnings and working times. For Wolt, we don’t have to arrange supervision, bosses, probation periods, targets, shift-scheduling, and such. Instead, we can concentrate on building a fast-growing digital marketplace where customers, couriers and merchants connect to when they want.
- Why doesn’t Wolt just go ahead and employ the couriers?
If we employed the couriers, we would – either because of the law or to have an efficient operation – have to assign the couriers bosses and shifts, tell them where to work and when, possibly start preferring certain vehicles over others, start looking into how much every individual courier works, and so forth. This would cause us extra costs in a situation where from our point of view – and the clear majority of the current couriers’ point of view – things are working currently fine.
For the couriers, they would possibly lose a huge part of their current freedom. What is more, we would only be able to offer work for a fraction of the 4,000 people who are currently able to log on to the Wolt platform when they want, and that work would be mostly offered as full-time work, to keep the cost manageable (as there would be new “per head” costs for each employed courier).
In addition, the initial response from our current courier partners has been that the overwhelming majority prefers the current contractor setup to a possible employment setup (out of the 80 messages we have received, 60+ have been for the current model and 2 for the employment model, rest being questions about the topic).
For these reasons, to only name a few, it’s a tough call to just change fully into employment without giving the topic proper thought and discussions with the authorities, the couriers themselves and policymakers. These discussions also go far beyond companies such as Wolt and our courier partners – this is more broadly about what kind of work we, as a society, want to see. We think this deserves a thorough, informed, and constructive debate.
- Why would a courier want to be self-employed if they could have the security of being an employee?
The reason varies per courier, but in general it comes down to the possibility of deciding what to do and when to do it, as well as being relatively happy with the current earnings level combined with the freedom it comes with.
As you can see from the charts above, we run regular anonymous surveys asking our courier partners how satisfied they are with us, among other things. 359 couriers in Finland responded to the most recent survey in September 2020. Out of those courier partners, 89,1 % are either satisfied or very satisfied with Wolt (first chart). The second chart shows satisfaction around compensation.
On top of these charts, 97% of couriers state that they are very satisfied or satisfied with the freedom of choosing when to go online. Being a Wolt courier partner is a rare entry-level job that offers the flexibility to work around one’s own schedule and lifestyle. It’s not for everyone, but to be frank, neither is sitting in an office for 8 hours a day. As the reasons are many, we think it’s very important to ask the couriers themselves why indeed they choose to partner with us, if they are happy, and how their setup could be improved.
The below graph is from the same survey, and shows why the couriers who like to deliver with us, do so.
- How many of the couriers would like to be employed?
A rough estimate according to research by an external research agency is that 60–75 percent would like to continue as contractors and prefer the freedom of being a contractor over the safety nets that come with being an employee. Roughly 20–25 percent would like to be employed. The rest could go with either model.
To read more about this topic, please check this article about research on this topic! 🙂
- Does Wolt just want to avoid the employer’s social security payments related to employment?
No. To us, this is more a question of where in the process are the social security payments carried out.
Currently, in Finland, the average courier earnings have been around 13–15 euros/online hour during the past months. From this, the couriers pay things like their YEL insurance, which provides them with pension protection and sick leave protection. The YEL system is how Finland has decided to arrange the social protection of all entrepreneurs. So, these social security payments are done after the courier is paid.
If Wolt would employ the couriers, the related social security payments would be done before the courier is paid (Wolt would deduct the employee-part of social payments and pay the employer-part). The couriers’ hourly wage would be somewhat lower, as Wolt would pay for certain social security payments (and using the difference euros for that). This is how Finland has decided to arrange the social protection of employees.
In our opinion, what’s key in the discussion is that the social security for an employee is more thorough and exhaustive than that of an entrepreneur. This is not good. We think it would be important to develop the Finnish system so that also the self-employed platform workers would automatically enjoy the same protections as employees.
- Does the Wolt courier model take advantage of immigrants?
It is true that in many of the cities in Finland, a significant part of our courier partners might have an immigrant background or roots abroad. We are proud of this, as we give people with limited or no local language skills access to work and income. However, on the other hand, not all of these people know the rules of the Finnish labour market inside out.
We try to tackle this issue through sharing information about the Finnish system and helping the courier partners with any day-to-day issues they might have. For example:
- We have prepared a 12-page document that explains the freedoms and responsibilities of entrepreneurs in Finland (including things like how to set up a business, how to pay VAT, how YEL insurance works etc). This document is available in both Finnish and English.
- We pay for the helpline of Suomen Yrittäjät (Finland’s Entrepreneurs) that courier partners can call for free, to get guidance on entrepreneurship in Finland.
- We are in open discussions with the Centre for Economic Development, Transport and the Environment (ELY-keskus) on how to prevent any situations of human tragedy, human trafficking or otherwise unlawful entrepreneurship.
- We are in dialogue with the Finnish Immigration Service Migri and do our best to follow their recommendations on how to be a responsible business partner.
- We have been in contact with the Finnish tax authority and met with them to understand how we can best support with making sure everything regarding our courier partners and their taxes is done right.
- We share information about FREE akatemia, which has free 60 minute lectures on entrepreneurship and responsibilities for Wolt’s couriers in Finland.
- Do the courier partners live on benefits provided by the welfare system?
No. Courier partners pay their part for the welfare system through the entrepreneur insurance (YEL), VAT (alv) system, and income taxation. Their safety nets such as pension insurance and sick leave protection are formed through the YEL system.
Part two: About the impact of employing the couriers
Please note that this section is very hypothetical and includes a lot of simplification of complicated issues. These are our attempts at answering these questions with the information that we currently have, but please remember that these answers might well be changed later on once we understand the implications of employment better.
- How would the job be different if a courier was self-employed or an employee?
The nature of a courier’s work would probably change quite dramatically if they’d be employed. In the current setup, a self-employed courier has a lot of flexibility and freedom, which also means carrying the responsibility for being an entrepreneur. If a courier is employed, indeed Wolt covers a lot of the responsibilities, but also the courier gives up a lot of flexibility and freedom. To illustrate in more detail, we’ve listed out what this looks like in the table at the end of this question.
In a contractor model, where couriers are self-employed natural persons, or registered private traders or companies, people can (and are legally required to be able to) freely decide when, how much and where they work, but safety nets aren’t as comprehensive compared to being an employee, and they are formed through things like the YEL insurance. Couriers can accept or reject orders. There are no tight language-skill or professional background requirements. The contractor model also makes it possible for a company to offer work for a large number of people. In Finland, there are currently around 4,000 couriers.
In an employment model, the safety nets would automatically be more comprehensive, but the work would, for example in Wolt’s case, be organized in a different way: Couriers would most probably be assigned a boss, shifts (time slots during which you have to work), and a specific area where the work could be carried out. Hourly gross earnings would be lower, as it would no longer be the courier paying for things like the YEL insurance but Wolt paying for certain social security payments for the courier. A courier could no longer freely choose, for example, their delivery vehicle. If employed, the courier could not decline to deliver any orders from Wolt, and they’d be subject to a probation period, and regular performance evaluations.
|Self-employed courier||Courier employed by Wolt|
|Number of couriers||4,000+ couriers currently in Finland who can log in to deliver when they want.||Number reduced to approx. 1,200–1,500 full-time couriers.|
|Freedom||Courier logs online and offline as they like.||Shifts predetermined by Wolt, courier must complete the shifts.|
|Gross earnings||Higher gross earnings. As the courier is a contractor, they make higher gross earnings to be able to pay for their insurances, pension and sick leave protection (YEL) and possible mileage.||Lower gross earnings: as Wolt covers insurances and social security and reimburses for mileage depending on the vehicle, a courier is paid less in gross salary.|
|Hours||No minimum / maximum hours.||Contract with each courier, has a minimum and maximum.|
|Exclusivity||Courier can work for other companies, including Wolt’s competitors.||A courier cannot work for a competitor and needs written approval for any additional work.|
|Location||No mandatory location, a courier decides where to start deliveries within their city of operation.||Yes. Courier must stick to locations mandated by Wolt.|
|Direct manager||No manager. Courier decides if, when and where to work and for how long. Wolt does not tell how to perform the work.||Yes. Wolt has the right to manage and control, how, when, where and for how long a courier makes deliveries.|
|Orders||A courier can freely accept and decline tasks.||A courier must accept and deliver all tasks offered.|
|Vehicle||A courier chooses their own vehicle.||Wolt hires couriers who use a vehicle that Wolt prefers.|
|Outfit||Courier decides what to wear (clothing provided by Wolt is voluntary to use).||Wolt mandates work outfit.|
|Training||No. 2 h onboarding session to understand how the app works, hear about responsibilities and freedoms as a contractor and get tips for maximising earnings.||Mandatory longer training on how to perform deliveries.|
|Trial period||No.||Yes. 6 months.|
|Insurances||Wolt offers optional free accident insurance, other insurances paid for by the courier.||Employer-required insurances paid for by Wolt.|
|Social security payments||YEL insurance paid for by the courier – covers things like pension insurance and sick leave protection.||Employee pays a small percentage, the majority is covered by Wolt as employer. More thorough protections including unemployment benefits.|
|Holiday pay||Courier is not paid while not delivering.||Courier gets paid holiday accrual as according to the Finnish law.|
As you can see from the above non-exhaustive list, the work is different for the individual courier, depending on whether they are self-employed or an employee with a significant amount of pros and cons in both options.
We understand the conversation around platform economy and gig work. We agree that there are things with self-employment that are in a need of improvement, and we’re trying to find the balance between flexibility and safety nets. And we’d like to do more for the self-employed couriers without as a consequence being forced into an employment model. It’s not about the costs of employment – if it were, we would not offer our courier partners with free insurance (Wolt pays the price) for the time they are online, nor had we set up the Covid-19 Partner Support Program. The program was set up during the corona-pandemic to offer financial support to those couriers who get diagnosed with Covid-19 or quarantined, as well as different kinds of support for our restaurant partners (including discounted commission on pickup orders, more frequent payment cycles and so on).
- If you employ the courier partners, can Wolt still operate?
Yes. But that means we need to restructure our entire way of operating in Finland.
Part three: About the Labour Council and their decision
On October 15, Wolt’s team in Finland received an opinion from “Työneuvosto”, ie. the Labour Council. This council is formed by 9 people, who give opinions on matters regarding employment in Finland. These opinions are not legally binding in any way, nor do they require action as such.
With regard to Wolt, the council gave us their written opinion about the nature of the relationship we have with our courier partners to determine whether legislation related to employees’ working hours should apply or not. In the opinion of the Labour Council, 6 out of 9 members think that the freelancer couriers should be classified as employees. 3 out of 9 members disagreed with the council’s majority and published their disagreement as part of the written opinion document.
We at Wolt value the council and their opinion, and we are currently looking into the matter in more detail. However, it’s fair to state that we are surprised with the council’s opinion, as in all previous interactions with other Finnish authorities (for example, tax inspections), they have classified the couriers as self-employed.
In the couple of weeks since, we’ve been receiving quite a few questions about the topic, so here’s 16 questions answered. If you have feedback or more questions, please feel free to send them to email@example.com. We might not be able to answer all emails, but we will collect frequently asked questions and update this post.
- Why is something called the Labour Council giving statements about this topic?
The Finnish Labour Council is an independent authority that provides opinions about Finnish employment legislation in matters that concern working hours, holidays, work safety and health, and other things related to the protection of employees. The council essentially interprets employment legislation and their opinions are seen as guidance. The council’s statements are not legally binding nor have any required actions. The council exists under the Ministry of Economic Affairs and Employment.
In early 2020, the Regional State Administrative Agencies (Aluehallintovirasto or AVI in Finnish) requested an opinion from the Labour Council to help it determine whether legislation related to employees’ working hours should apply to food couriers or not, in the case of both Wolt and Foodora. For the council to have an opinion on the working hours, they first needed to form an opinion on whether the couriers should be interpreted as employees.
- What was the Finnish Labour Council’s opinion on Wolt’s courier partners?
In their statement about Wolt and our way of working with the couriers, 6 out of 9 council members think that the Wolt couriers who work with us as self-employed natural persons (including registered private traders) should in general be classified as employees. 3 out of the 9 members left a separate statement stating that they think the opposite: all couriers should be considered contractors. The opinion also emphasises that individual cases need to be assessed separately and might lead to different outcomes (in court, for example).
- What was the council’s process for making the opinion?
The Labour Council received AVI’s request in February, and we received a letter from the council later that month. We then provided the council with a written response in April, and per request sent more information in early September. All communication between Wolt and the Labour Council has been in writing. The council didn’t request any information from the couriers themselves.
- Does the council’s opinion mean that couriers will now automatically become employees?
No. The role of the Labour Council is to give opinions or interpretations of the current law, but their opinions are not legally binding. Their opinion is used as one input, for example, in the Regional State Administrative Agencies own decision-making process. All legally binding decisions are made by the Finnish courts of law, and the council stated that individual cases need to be assessed in court and might lead to a different conclusion. Laws are drafted and decided by the Parliament.
However, it’s still very early days for the entire platform industry, and we, for one, have been looking into different models for some time now. It’s worth noting that the issue we’re ultimately solving as a society is complex, and all solutions have their pros and cons. Please see more about this below, under question 15.
- What happens next, then?
The key takeaway is that we don’t yet know if we move towards employing or not.
We now wait for the Regional State Administrative Agency (aluehallintovirasto or AVI in Finnish) to contact us and discuss possible next steps. Our understanding is that most probably they will suggest that we should move towards employing the natural person couriers (everyone except couriers working through OY, AY and KY companies) in a time frame that’s probably negotiable, and in the ballpark of 6–12 months (this is still highly speculative as it’s their decision). We will then weigh our options, discuss with the couriers, ask for their thoughts, discuss with the policymakers, think about what employment would look like in theory – and finally decide the way forward, probably sometime early next year.
If we think employing is the best way forward, we’ll start making changes and discussing with the couriers about how to get there. If we feel it is not the right or fair way forward for all parties and all effects considered, we can then send our appeal about AVI’s decision about us to a court. However, how that bit of the process specifically works and how long it would take is still unclear.
- Why does the Labour Council think that the couriers should be employees?
The full opinion is 29 pages long, and we encourage anyone interested reading it (available here, but unfortunately in Finnish only). One of the key reasonings, as we interpret the opinion, comes down to Wolt – through the digital platform that the couriers use for accepting and declining delivery tasks – having a theoretical ability to supervise and control the couriers. In the Labour Council’s opinion, it doesn’t matter if we actually use this ability or not. Instead, they state that the mere possibility for such control can be seen as one key reason to interpret the relationship as employment.
- Does Wolt agree with the Labour Council and why?
In our view, the opinion is quite surprising. It essentially implies that the very existence of the same digital platform that allows for the work opportunity to exist, is also one key reason for interpreting the relationship between Wolt and a courier as employment. In previous internal and external evaluation of the relationship, emphasis has been put on the entrepreneur-like freedom of the couriers, e.g. their ability to choose when they work, where they work, them working with their own equipment, them being paid per task, them having a service agreement with Wolt, them paying for their own entrepreneur’s insurances, and so forth.
Thank you for reading, and if you do have more questions, please feel free to send them to firstname.lastname@example.org. We might not be able to answer all emails, but we will collect frequently asked questions and update this post.